Grass Valley couple faces federal gun charges, local drug accusations |

Grass Valley couple faces federal gun charges, local drug accusations

A Grass Valley couple faces weapons and drug accusations after local and federal officers descended Thursday on a Towle Lane home, authorities said.

The arrest of Michael Smith, 44, stems from a months-long investigation by federal Homeland Security Investigations involving the sale of illegal AR-15 rifles. Smith faces charges of unlawful dealing and manufacturing in firearms and unlawful possession of an unregistered firearm, documents state.

Smith remained Friday afternoon in the Sacramento County Jail without bond, records show.

Julie Mae Smith, 42, faces state charges of manufacturing a controlled substance, possession of a controlled substance while armed, possession of a controlled substance and a probation violation, Nevada County Jail records state.

Julie Smith remained Friday in the Nevada County Jail under $42,500 in bond, authorities said.

“I know the feds had asked us to assist them with their operation,” sheriff’s Lt. Robert Jakobs said of the Thursday arrests.

According to a federal affidavit, agents began investigating Michael Smith on Oct. 5 after he contacted an undercover agent on the dark web — a hidden portion of the internet used for illicit activity. Michael Smith discussed buying grenades, explosives and anti-personnel mines. He also negotiated the sale of “ghost” AR-15 short-barreled semi-automatic rifles, selling eight total to the agent on two occasions.

Michael Smith contacted an undercover email account on Oct. 5, saying he loved to build and use firearms. Agents tentatively identified Smith about a week later. They linked him to a 14000-block Towle Lane home, and connected a woman identified as “Julie Smith” to a debit card attached to Michael Smith’s online account, the affidavit states.

Michael Smith then negotiated the sale of AR-15s in October and November. The transaction — using $4,400 in Bitcoin — happened Dec. 1 at the Bass Pro Shops in Rocklin, the affidavit states.

“Smith said that he quit his job to take care of his wife, and building and selling rifles has been good financially for him,” it adds.

Authorities sent the rifles purchased from Michael Smith to a testing facility. All fired successfully, documents state.

Nevada County authorities arrested Michael Smith on local burglary accusations before he could arrange a second sale to the agent. They found him hiding in the attic of a Towle Lane home, authorities said.

Negotiations between Michael Smith and the undercover agent continued about a week later, and a second sale occurred Jan. 4, again at Bass Pro Shops. He and the agent then began discussing a third sale for Thursday — the day he and Julie Smith were arrested on Towle Lane, the affidavit and authorities state.

Based on the affidavit a federal judge issued arrest and search warrants for Michael Smith and sealed the affidavit, the document shows.

To contact Staff Writer Alan Riquelmy, email or call 530-477-4239.

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